WAKE FOREST - The Wake County Public School System is moving ahead with plans to build a new school in partnership with a private company - a departure from traditional school construction, and a plan that insiders say comes with pros and cons.

On Feb. 5, the county school board approved a short list of three development teams that will provide detailed proposals for building an elementary school that is scheduled to open in Wake Forest in 2010. Once the school is built, the company would lease it to the district.

The three development teams on the short list are: the team of Balfour Beatty Capital, Balfour Beatty Construction, SchenkelShultz Architecture and Heery International; First Choice Public Private Partners LLC - an association of English Construction Co. and Moseley Architects; and a team comprising Place Enterprises LLC, Little Diversified Architectural Consulting, and Clancy and Theys Construction Co.

The board plans to decide in April if it wants to build the school under a public-private partnership. If approved, this would be the first public school in Wake County built through such a partnership. Other counties statewide are pursuing similar plans. Charlotte-Mecklenburg County Schools has several public-private renovation projects in the works, while Cumberland County Schools has researched building an energy-efficient school in Fayetteville under a public-private partnership.

NO DECISION YET

Mike Burriss, assistant superintendent in charge of facilities for Wake County Schools, says a public-private partnership is just one option being considered.

"When we do make a decision in April, we'll have a response from public-private firms for their general lease rates and their specifications for the building and how that compares to our cost of capital and design program," Burriss says. "They would move ahead if they would compare comparably or favorably to the goals of the board of education, and if not, they would still be able to deliver the school on time."

Ben Matthews, director of the school support division of the North Carolina Department of Public Instruction, says that since the General Assembly passed legislation making public-private partnerships possible in 2006, several school systems in North Carolina have looked into using it as a way to build new schools in areas that need to expand or repair their facilities.

"We supported this legislation because we are always interested in anything that will assist the school district in building schools, because there is so much need out there in these growing counties," Matthews says. "It's one of those deals that are so large, and because no one's ever done it, they're kind of afraid of it."

Matthews says that the public-private partnership offers several advantages.

"On the positive side, a private entity - if they enter into a deal in a district to build several schools - because of scale capabilities, they could purchase materials in bulk, which would lower costs, something a county building one school at a time could not do," Matthews says.

Also, county officials would not have to approach voters to approve a bond.

"You could have a clear need for a school - it could be dilapidated and falling down, and you'd need to replace it, but the public would be afraid of a tax increase on their property, so they'd vote down the bond," Matthews says.

"If you go into a public-private partnership, the county commissioners could enter into a deal, working with the school board of course, and therefore the county could build the school that's needed for the kids," Matthews says.

BUILT TO LAST?

Yet the partnership also has some drawbacks.

"A downside is that a developer might not be interested in building something that would last longer than the lease," Matthews says. "If the developer is clever, they can make sure they don't spend more money than they need to make the building last a specific amount of time. For example, if you have a 20-year lease, you might not want to buy more expensive materials that would make the building last 30 years."

Some developers are eager to enter into a public-private partnership.

Robbie Ferris, CEO and president of SFL+A Architects and FirstFloor K-12 Solutions LLC, has championed the system, traveling around the country to answer questions from school districts interested in pursuing public-private partnerships.

"I feel the future really is within the K-12 market," Ferris says. "We're talking to about six to eight school systems about capital leases, and I get calls from school systems every week who want more information because they're interested in learning more about capital leases."

Ferris says that public-private partnerships are a better way to build new schools.

"We believe that it is a better delivery system," Ferris says. "We've run the numbers, and we know that it's better for school systems. We also believe that it is the future of public buildings. We believe this is the way public buildings should be built, at least for the next 15 to 20 years."

Still, Ferris has run into difficulties - his company's efforts to build the energy-efficient school have moved slowly, and SFL+A and FirstFloor recently failed to make the short list for the Wake County project. "Obviously, we're disappointed, but we believe what we offered, which was saving money over time, was not what they were looking for," Ferris says.

SOME SEE SAVINGS

Ferris also rejects criticism that Wake County's ability to get good interest rates on general obligation bonds means public-private partnerships would not result in substantial savings.

"The interest rate for a general obligation bond is not necessarily lower than the rate would be for a public-private partnership," Ferris says. "We just quoted some interest rates in the 4.2 to 4.3 percent rate range on public-private partnerships, and to my understanding that is a lower rate than the bond rate."

So, would a public-private partnership result in taxpayer savings?

Burriss says that the school board is examining the issue. "On the issue of funding, and whether or not the capital or the need for it is there yet, it's important to first develop the process, because the need might arrive," Burriss says.

"Second, if we don't go through and see what hurdles we do need to overcome, we don't have a way to improve the process before we need it if we need it," Burriss says. And I think it also really opens the door to a good process to be examined by the public, of all of the positives that you do hear."

In a few months, the school board will decide if a public-private partnership is viable for building the new school in Wake Forest. And if it moves forward, this could be the start of a new building trend for schools in Wake County. "If it's successful, then it's another opportunity for the school system and county to figure out how to use it in future counties and programs," Burriss says.

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